PRC Risk Transparency Act
Chairman John Moolenaar (R-MI) and House Financial Services Subcommittee on National Security, Illicit Finance, and International Financial Institutions Chairman Blaine Luetkemeyer (R-MO) today introduced the PRC Risk Transparency Act to ensure transparency into the material and systemic risk posed by U.S. investment in and reliance on China.
The PRC Risk Transparency Act will require public companies with meaningful exposure to China to disclose what percentage of their revenue, profit, capital investment, and supply chain is tied to the PRC. It will also require these companies to disclose their relationships with the Chinese Communist Party and with companies identified by the U.S. government as national security threats or human rights violators.
Additionally, the bill would require those companies to assess what a geopolitical conflict with China would mean for their business by mandating a market access loss scenario describing a situation where U.S.-China trade falls by 80% due to Chinese military aggression, leading to mutual sanctions and asset seizures. Lastly, it directs investment firms to disclose their holdings of and exposure to certain Chinese securities.
"Our Select Committee's investigations have shown that Wall Street and American companies are deeply entangled with China, so a military confrontation with the PRC would be devastating to those firms – and to American investors", said Chairman Moolenaar. "All Americans have a right to understand that material risk. I am proud to support the PRC Risk Transparency Act to give investors and lawmakers the information they need to understand the systemic risks posed by investing capital in our foremost adversary. Thank you to Congressman Luetkemeyer for his important leadership on this issue.”
“The geopolitical tensions between the United States and the People's Republic of China (PRC) pose significant risks to American investors and our financial markets. The PRC Risk Transparency Act is critical in arming our investors with the necessary material information to make informed decisions and protect their financial interests," said Congressman Luetkemeyer. “This is a proactive step in fortifying our economy against the risks posed by the PRC and ensures the long-term stability of our financial markets as we navigate increased Chinese aggression towards the United States and our allies.”
Click HERE to read bill text.